The online one-stop shop that’s open for business

07.11.2013

For integrated brokerage and fund platform firm, EXANTE, setting up in Malta in 2011 was certainly a case of ‘New Kid on the Block’. Historically, the island has always been a nation of savers. The investment industry has necessarily developed to reflect this fact, where the general sentiment is one of long-term investing with low risk appetite.

When you consider that EXANTE prides itself on having cutting edge technology, a co-location infrastructure, and what is, to all intents and purposes, a highly sophisticated trading infrastructure well suited to high frequency traders, their establishment on the island was clear for all to see. Speaking with Hedgeweek, Gatis Eglitis one of EXANTE’s managing partners, says: “The main value EXANTE brings to Malta is really the fact that we offer something different: high frequency, trading-oriented. So really we are filling in the missing piece of the puzzle of Malta’s conservative investment environment.” Attending a recent Finance Malta conference, Eglitis says he was surprised that very few of the investment managers he spoke to were investing in credit derivatives, statistical equity arbitrage strategies, futures etc; more plain vanilla investment strategies were the focus of their attention.

This may start to change. As the smart money continues to flow from other parts of Europe, the potential for Malta’s investment fund industry to get more sophisticated is high. Malta has never really had a cutting-edge global broker able to meet the needs of aggressive investment managers such as hedge funds, who rely on leverage, competitive prices and access to a range of derivative instruments; EXANTE plugs that gap. And when you look at some of Finance Malta’s statistics, their timing seems good: 109 investment services licenses, 539 funds (179 new licenses) representing a 24 per cent year-on-year growth, and EUR8.3billion in NAV. Malta is now the fastest growing financial services sector in Europe. Says Eglitis: “We can help companies that choose to domicile their funds here fulfil their potential by offering a global infrastructure. If they have to choose a broker or platform to trade global markets there’s literally no one in Malta except us that is able to provide all the tools. “For a hedge fund considering a domicile like Malta, knowing that such a brokerage company existed would certainly add to its overall attraction.” However, trade execution is only half the story. EXANTE also hosts a multi-asset fund platform, which operates solely online via the internet. Not only can funds trade global markets, they can also market themselves and their strategies to all of EXANTE’s global customers. “In that sense what we offer is truly a one-stop shop,” states Eglitis.

To emphasise, EXANTE is not only interested in high volume clients running sophisticated strategies: it is happy to deal with all kinds of clients, be they local or international, long-only equity or high frequency quant trader. Says Eglitis: “Regardless of who the passenger is, they still get to enjoy riding in a Bentley. Whether clients are HFTs or long-term conservative money managers, the infrastructure is sound and gives them quality execution and affordable pricing.” Right now, the firm has around 70 clients and 50 funds totalling in excess of EUR1.5billion in AUM. It has, confirms Eglitis, already established relationships with some of Malta’s market leaders including the island’s largest retail broker.

“Whether clients are making thousands of transactions a day or simply buying and holding instruments long-term makes no difference to our business model. All are welcome and the pricing is the same for everyone, regardless of whether they are high or low volume traders.”